PURCHASE AGREEMENT
THIS
PURCHASE AGREEMENT (this "Agreement") is made and entered into as of January
26,
2007 (the “Closing Date”), by and between POSITRON
CORPORATION, a
publicly owned Texas corporation (the “Company”), and IMAGING
PET TECHNOLOGIES, INC.,
a
Canadian corporation (the “Purchaser”).
RECITALS
WHEREAS,
the
Company desires to sell all the Company’s interest in QUANTUM MOLECULAR
TECHNOLOGIES, INC. (the “QMT”) and the Purchaser desires to purchase the all the
interest in QMT pursuant to the terms and conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the foregoing recitals and the mutual promises,
representations, warranties and covenants hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
AGREEMENT
1. Agreement
to Sell and Purchase.
Pursuant to the terms and conditions set forth in this Agreement, on the Closing
Date, the Company agrees to sell to the Purchaser, and the Purchaser hereby
agrees to purchase from the Company, THIRTY MILLION (30,000,000) common shares
of QMT (the “QMT Shares”) for the purchase price of TWO MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($2,800,000.00), in lawful money of the United States of
America (the “Purchase Price”). The Purchaser shall deliver the Purchase Price
in the form of a promissory note (the “Note”) attached hereto as Exhibit A. The
Note, together with interest at the rate of 0 percent (0%) per annum, is payable
before July 1, 2008 (the “Due Date”).
2. Closing,
Delivery and Payment.
2.1 Closing.
Subject
to the terms and conditions herein, the closing of the transactions contemplated
hereby (the "Closing"), shall take place as set forth within the Exchange
Agreement (such date is hereinafter referred
to
as the “Closing Date”).
2.2 Delivery.
At the
Closing on the Closing Date, the Company will deliver to the Purchaser, among
other items, a Certificate representing the QMT Shares and the Purchaser shall
deliver the Note and
a
Collateral Pledge Agreement securing the Purchaser’s obligations under the Note.
(A form of the Collateral Pledge Agreement is attached hereto as Exhibit “B”).
3. Representations
and Warranties of the Company.
The
Company hereby represents and warrants to the Purchaser as follows (which
representations and warranties are supplemented by the Company's filings under
the Securities Exchange Act of 1934 (collectively, the "Exchange Act
Filings"),:
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3.1 Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas. The Company has the corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, and to carry out the provisions of this Agreement and the
Related Agreements and to carry on its business as presently conducted. The
Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation, in all jurisdictions in which the nature
of
its activities and of its properties (both owned and leased) makes such
qualification necessary.
3.2 Title,
Encumbrances.
The
Company is the owner of the securities set forth herein (the “Securities”) free
and clear of all encumbrances and, on the Closing Date will transfer the QMT
Common shares free and clear of all liens, pledges, encumbrances, security
in
trust or other restrictions.
3.3 Authorization;
Binding Obligations.
All
corporate action on the part of the Company (including the respective officers
and directors) necessary for the authorization of this Agreement and the Related
Agreements, the performance of all obligations of the Company hereunder and
under the other Related Agreements at the Closing has been taken or will be
taken prior to the Closing. This Agreement and the other Related Agreements,
when executed and delivered and to the extent it is a party thereto, will be
valid and binding obligations of the Company, enforceable in accordance with
their terms, except:
(a
) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights;
and
(b) general
principles of equity that restrict the availability of equitable or legal
remedies.
4. Representations
and Warranties of the Purchaser.
The
Purchaser hereby represents and warrants to the Company as follows (such
representations and warranties do not lessen or obviate the representations
and
warranties of the Company set forth in this Agreement):
4.1 Requisite
Power and Authority.
The
Purchaser has all necessary power and authority under all applicable provisions
of law to execute and deliver this Agreement and the Related Agreements and
to
carry out their provisions. All action on Purchaser's part required for the
lawful execution and delivery of this Agreement and the Related Agreements
has
been or will be effectively taken prior to the Closing. Upon their execution
and
delivery, this Agreement and the Related Agreements will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms,
except:
(a) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other laws of general application affecting enforcement of creditors' rights;
and
(b) as
limited by general principles of equity that restrict the availability of
equitable and legal remedies.
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4.2 Investment
Representations
Purchaser understands that the Securities are being offered and sold pursuant
to
an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement, including, without
limitation, that the Purchaser is an "accredited investor" within the meaning
of
Regulation D under the Securities Act. The Purchaser confirms that it has
received or has had full access to all the information it considers necessary
or
appropriate to make an informed investment decision with respect to the
Preferred Shares to be purchased by it under this Agreement and the Preferred
Shares acquired by it upon the conversion of the Note. The Purchaser further
confirms that it has had an opportunity to ask questions and receive answers
from the Company regarding the Company's business, management and financial
affairs and the terms and conditions of the Offering, the Preferred Shares
and
the Securities and to obtain additional information (to the extent the Company
possessed such information or could acquire it without unreasonable effort
or
expense) necessary to verify any information furnished to the Purchaser or
to
which the Purchaser had access.
4.3 Purchaser
Bears Economic Risk.
The
Purchaser has substantial experience in evaluating and investing in private
placement transactions of securities in companies similar to the Company so
that
it is capable of evaluating the merits and risks of its investment in the
Company and has the capacity to protect its own interests. The Purchaser must
bear the economic risk of this investment until the Securities are sold pursuant
to: (i) an effective registration statement under the Securities Act; or (ii)
an
exemption from registration is available with respect to such sale
4.4 Acquisition
for Own Account.
The
Purchaser is acquiring the Preferred Shares and the Conversion Shares for the
Purchaser's own account for investment only, and not as a nominee or agent
and
not with a view towards or for resale in connection with their
distribution.
4.5 Purchaser
Can Protect Its Interest.
Purchaser represents that by reason of its, or of its management's, business
and
financial experience, the Purchaser has the capacity to evaluate the merits
and
risks of its investment in the Preferred Shares and the Securities and to
protect its own interests in connection with the transactions contemplated
in
this Agreement and the other Related Agreements. Further, Purchaser is aware
of
no publication of any advertisement in connection with the transactions
contemplated in the Agreement or the Related Agreements.
4.6 Accredited
Investor.
(a) The
Purchaser is an "Accredited Investor" as defined in Rule 501(a) of Regulation
D
under the Securities Act.
(b) (i)
The
person executing this Agreement on behalf of the Purchaser does so with full
right, power and authority to make this investment; (ii) the Purchaser was
not
formed for the specific purpose of making an investment in the Company; and
(iii) all representations and warranties made herein by the Purchaser are true
and correct in all material respects.
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(c) The
addresses set forth below in Section 9.8 are the Purchaser's true and correct
residences or places of business, and the Purchaser has no present intention
of
becoming a resident of any other state or jurisdiction.
(d) The
Purchaser understands that the Company prohibits the investment of funds by
any
persons or entities that are acting, directly or indirectly, (i) in
contravention of any United States of America (“U.S.”) or international laws and
regulations, including anti-money laundering regulations or conventions, (ii)
on
behalf of terrorists or terrorist organizations, including those persons or
entities that are included on the List of Specially Designated Nationals and
Blocked Persons maintained by the U.S. Treasury Department's Office of Foreign
Assets Control ("OFAC"), as such list may be amended from time to time, (iii)
for a Senior Foreign Political Figure (as defined below), any member of a Senior
Foreign Political Figure’s immediate family or any close associate of a Senior
Foreign Political Figure, unless the Company, after being specifically notified
by the Purchaser in writing that it is such a person, conducts further due
diligence, and determines that such investment shall be permitted, or (iv)
for a
Foreign Shell Bank (such persons or entities in (i) - (iv) are collectively
referred to herein as "Prohibited Persons"). As used in this Agreement, (x)
a
“Senior
Foreign Political Figure” means a senior official in the executive, legislative,
administrative, military or judicial branches of a foreign government (whether
elected or not), a senior official of a major foreign political party, or a
senior executive of a foreign government-owned corporation, any corporation,
business or other entity that has been formed by, or for the benefit of, any
such person (it being understood that a “close associate” of a Senior Foreign
Political Figure is a person who is widely and publicly known internationally
to
maintain an unusually close relationship with such Senior Foreign Political
Figure, and includes a person who is in a position to conduct substantial
domestic and international financial transactions on behalf of the Senior
Foreign Political Figure), and (y) a “Foreign Shell Bank” means a foreign bank
without a physical presence in any country, but does not include a regulated
affiliate (it being understood that (I) a post office box or electronic address
would not be considered a physical presence and (II) a “regulated affiliate”
means a foreign shell bank that: (1) is an affiliate of a depository
institution, credit union, or foreign bank that maintains a physical presence
in
the U.S. or a foreign country, as applicable; and (2) is subject to supervision
by a banking authority in the country regulating such affiliated depository
institution, credit union, or foreign bank).
(e) (i)
It is
not, nor is any person or entity controlling, controlled by or under common
control with the Purchaser, a Prohibited Person, and (ii) to the extent the
Purchaser has any Beneficial Owners, (a) it has carried out thorough due
diligence to establish the identities of such Beneficial Owners, (b) based
on
such due diligence, the Purchaser reasonably believes that no such Beneficial
Owners are Prohibited Persons, (c) it holds the evidence of such identities
and
status and will maintain all such evidence for at least five years from the
date
of the Purchaser's complete withdrawal from the Company, and (d) it will make
available such information and any additional information requested by the
Company that is reasonably required under applicable regulations. A “Beneficial
Owner”, as used in this Section 4.7(e), shall include, but is not limited to:
(i) shareholders of a corporation; (ii) partners of a company; (iii) members
of
a limited liability company; (iv) investors in a fund-of-funds; (v) the grantor
of a revocable or grantor trust; (vi) the beneficiaries of an irrevocable trust;
and (vii) any person being represented by the Purchaser in an agent,
representative, intermediary, nominee or similar capacity.
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5. Covenants
of the Company.
The
Company covenants and agrees with the Purchaser as follows:
5.1 Confidentiality.
The
Purchaser agrees that it will not disclose, and will not include in any public
announcement, the name of the Company, unless expressly agreed to by the Company
or unless and until such disclosure is required by law or applicable regulation,
and then only to the extent of such requirement.
5.2 Non-Public
Information.
The
Purchaser agrees not to effect any sales in the shares of the Company's Common
Stock while in possession of material, non-public information regarding the
Company if such sales would violate applicable securities law.
6. Covenants
of the Purchaser.
The
Purchaser covenants and agrees with the Company as follows:
6.1 Confidentiality.
The
Purchaser agrees that it will not disclose, and will not include in any public
announcement, the name of the Company, unless expressly agreed to by the Company
or unless and until such disclosure is required by law or applicable regulation,
and then only to the extent of such requirement.
6.2 Non-Public
Information.
The
Purchaser agrees not to effect any sales in the shares of the Company's Common
Stock while in possession of material, non-public information regarding the
Company if such sales would violate applicable securities law.
7. Covenants
of the Company and Purchaser Regarding Indemnification.
7.1 Company
Indemnification.
The
Company agrees to indemnify, hold harmless, reimburse and defend the Purchaser,
each of the Purchaser's officers, directors, agents, affiliates, control
persons, and principal shareholders, against any claim, cost, expense,
liability, obligation, loss or damage (including reasonable legal fees) of
any
nature, incurred by or imposed upon the Purchaser which results, arises out
of
or is based upon: (i) any misrepresentation by the Company or breach of any
warranty by the Company in this Agreement, any other Related Agreement or in
any
exhibits or schedules attached hereto or thereto; or (ii) any breach or default
in performance by Company of any covenant or undertaking to be performed by
Company hereunder, under any other Related Agreement or any other agreement
entered into by the Company and Purchaser relating hereto or
thereto.
7.2 Purchaser's
Indemnification.
Purchaser agrees to indemnify, hold harmless, reimburse and defend the Company
and each of the Company's officers, directors, agents, affiliates, control
persons and principal shareholders, at all times against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable legal
fees)
of any nature, incurred by or imposed upon the Company which results, arises
out
of or is based upon: (i) any misrepresentation by Purchaser or breach of any
warranty by Purchaser in this Agreement or in any exhibits or schedules attached
hereto or any Related Agreement; or (ii) any breach or default in performance
by
Purchaser of any covenant or undertaking to be performed by Purchaser hereunder,
or any other agreement entered into by the Company and Purchaser relating
hereto.
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8. Miscellaneous.
8.1 Governing
Law/Arbitration.
THIS
AGREEMENT AND ALL MATTERS CONNECTED WITH THE PERFORMANCE THEREOF SHALL BE
CONSTRUED, INTERPRETED, AND GOVERNED IN ALL RESPECTS BY THE LAWS OF THE STATE
OF
TEXAS. THE COMPANY AND THE PURCAHSER AGREE THAT ANY DISPUTE OR CONTROVERSY
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY ALLEGED BREACH HEREOF
SHALL BE SETTLED EXCLUSIVELY BY ARBITRATION IN HOUSTON, TEXAS PURSUANT TO THE
RULES OF THE AMERICAN ARBITRATION ASSOCIATION. IF THE TWO PARTIES CANNOT JOINTLY
SELECT A SINGLE ARBITRATOR TO DETERMINE THE MATTER, ONE ARBITRATOR SHALL BE
CHOSEN BY EACH PARTY (OR, IF A PARTY FAILS TO MAKE A CHOICE, BY THE AMERICAN
ARBITRATION ASSOCIATION ON BEHALF OF SUCH PARTY) AND THE TWO ARBITRATORS SO
CHOSEN WILL SELECT A THIRD. THE DECISIONS OF THE SINGLE ARBITRATOR JOINTLY
SELECTED BY THE PARTIES, OR, IF THREE ARBITRATORS ARE SELECTED, THE DECISION
OF
ANY TWO OF THEM, WILL BE FINAL AND BINDING UPON THE PARTIES AND THE JUDGMENT
OF
A COURT OF COMPETENT JURISDICTION MAY BE ENTERED THEREON. FEES OF THE
ARBITRATORS AND COSTS OF ARBITRATION (INCLUDING ATTORNEYS’ FEES) SHALL BE BORNE
BY THE PARTIES IN SUCH MANNER AS SHALL BE DETERMINED BY
THE
ARBITRATOR OR ARBITRATORS.
8.2 Survival.
The
representations, warranties, covenants and agreements made herein shall survive
any investigation made by the Purchaser and the closing of the transactions
contemplated hereby to the extent provided therein. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by
the
Company hereunder solely as of the date of such certificate or
instrument.
8.3 Successors.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, heirs, executors and
administrators of the parties hereto and shall inure to the benefit of and
be
enforceable by each person who shall be a holder of the Securities from time
to
time, other than the holders of Common Stock which has been sold by the
Purchaser pursuant to Rule 144 or an effective registration statement. Purchaser
may not assign its rights hereunder to a competitor of the Company.
8.4 Entire
Agreement.
This
Agreement, the Related Agreements, the exhibits and schedules hereto and thereto
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by
any
representations, warranties, covenants and agreements except as specifically
set
forth herein and therein.
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8.5 Severability.
In case
any provision of the Agreement shall be invalid, illegal or unenforceable,
the
validity, legality and enforceability of the remaining provisions shall not
in
any way be affected or impaired thereby.
8.6 Amendment
and Waiver.
(a) This
Agreement may be amended or modified only upon the written consent of the
Company and the Purchaser.
(b) The
obligations of the Company and the rights of the Purchaser under this Agreement
may be waived only with the written consent of the Purchaser.
(c) The
obligations of the Purchaser and the rights of the Company under this Agreement
may be waived only with the written consent of the Company.
8.7 Delays
or Omissions.
It is
agreed that no delay or omission to exercise any right, power or remedy accruing
to any party, upon any breach, default or noncompliance by another party under
this Agreement or the Related Agreements, shall impair any such right, power
or
remedy, nor shall it be construed to be a waiver of any such breach, default
or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. All remedies, either under this
Agreement or the Related Agreements, by law or otherwise afforded to any party,
shall be cumulative and not alternative.
8.8 Notices.
notices
required or permitted hereunder shall be in writing and shall be deemed
effectively given:
(a) upon
personal delivery to the party to be notified;
(b) when
sent
by confirmed facsimile if sent during normal business hours of the recipient,
if
not, then on the next business day;
(c) three
(3)
business days after having been sent by registered or certified mail, return
receipt requested, postage prepaid; or
(d) one
(1)
day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt.
All
communications shall be sent as follows:
If
to the Company, to:
|
Positron
Corporation
|
0000
Xxxxxxx Xxxxx Xx #000
Xxxxxxx,
Xxxxx 00000
Attention:
|
Chief
Executive Officer
|
Facsimile:
|
(000)
000-0000
|
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with
a copy to:
Levy
& Boonshoft, P.C.
000
Xxxxxxx Xxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
|
Xxxxx
Xxxxxxxxxxx, Esq.
|
Facsimile:
|
(000)
000-0000
|
If
to the Purchaser, to:
|
Imaging
PET Technologies, Inc.
|
00
Xxxxx
Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx,
XX, X0X 0X0
Attention:
|
Xxxxx
Olinoski
|
Facsimile:
|
(000)
000-0000
|
or
at
such other address as the Company or the Purchaser may designate by written
notice to the other parties hereto given in accordance herewith.
8.9 Attorneys'
Fees.
In the
event that any suit or action is instituted to enforce any provision in this
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, including,
without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.
8.10 Titles
and Subtitles.
The
titles of the sections and subsections of this Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
8.11 Facsimile
Signatures; Counterparts.
This
Agreement may be executed by facsimile signatures and in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.12 Broker's
Fees.
Each
party hereto represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
Each party hereto further agrees to indemnify each other party for any claims,
losses or expenses incurred by such other party as a result of the
representation in this Section 11.12 being untrue.
8.13 Construction.
Each
party acknowledges that its legal counsel participated in the preparation of
this Agreement and the Related Agreements and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Agreement to favor
any
party against the other.
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IN
WITNESS WHEREOF,
the
parties hereto have executed the Securities Purchase Agreement as of the date
set forth in the first paragraph hereof.
POSITRON
CORPORATION
|
IMAGING
PET TECHNOLOGIES, INC.
|
|||
By:
|
/s/ Xxxxxxx Xxxxxx |
By:
|
/s/ Xxxxx Olinoski | |
Xxxxxxx
Xxxxxx, Chairman
|
Xxxxx
Olinoski, President & CEO
|
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